On 1st January 2012 the Junta de Andalucía introduced several changes on how taxes under the jurisdiction of the autonomous region will be calculated.
More specifically transfer tax and stamp duty (in Spanish “Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados”) have been overall increased. Transfer tax and Stamp duty are regulated by the Royal decree 1/1993 of the 24th of September and enforced with the Royal decree 828/1995 of the 29th of May.
What is the object of transfer tax and Stamp duty?
The objects of these taxes are:
1) Purchase of resale properties or rights. For example: real estate, second hand vehicles (boats, cars, motorbikes…). The sum to be taxed will be the highest between the one declared in the deeds/contract and the one given by the tax authorities. (The amount used in property transactions is calculated using coefficients of the cadastral value of the estate).
2) Corporate deeds: company formation, company merger and acquisitions, changes in company capital and company liquidations.
3) Public deeds and Legal acts, not included in points one and two: the taxable value will be the amount declared in the document.
Transfer Tax in Figures
1 – Real Estate
The transfer tax will be progressive using differential bands. For example the sale of a villa for one million euro, will be charged:
For resale properties
Imposable base bracket 0.00€ to 400,000.00€ – Transfer tax rate 8%
Imposable base bracket 400,000.01€ to 700,000.00 – Transfer tax rate 9%
Imposable base bracket 700,000.01 and above – Transfer tax rate 10%
For resale of properties qualified as garages
Imposable base bracket 0.00€ to 30,000.00€ – Transfer tax rate 8%
Imposable base bracket 30,000.01€ to 50,000.00 – Transfer tax rate 9%
Imposable base bracket 50,000.01 and above – Transfer tax rat 10%
For New properties
For new properties there is no transfer tax but VAT of 4% for now. It is still not clear if VAT will be increased during 2012. New properties are subject to VAT pay also stamp duty (1,20%).
2 – For Vehicles, rights and others.
As a general rule it will be 4%, of the highest value between the declared amount in the contract/deeds and the one given by the tax authorities.
The sum is 8% for: boats of more than 8 meters in length, vehicles of more than 15 fiscal horse power and art objects and antiques.
3 – Transfer of rights: guarantees, pensions, gages, loans and credits
The transfer tax will be set at 1%.
4 – Exceptions
• For real estate intended for habitual residence with a value below 130,000€ and when the acquirer is under 35 years old: 3.5%.
• For real estate intended for habitual residence with a value below 180,000€ and when the acquirer is disabled: 3.5%.
• For real estate intended for resale by a professional or a company responding to the requisites of the General Plan in the real Estate sector (in Spanish “Plan General del Sector Inmobiliario”): 2%. The resale will have to take place within 5 years from the purchase.
Tax on Corporate transactions in figures
In corporate transactions, the tax rate is 1%
Stamp duty in figures
Stamp duty will increase or decrease according to different criteria:
• 1.2% for notary deeds intended for objects accountable in the Property Registry, the Commercial Registry, Industrial Property and Personal Property Registry, and properties subject to VAT.
• 0.3% for the purchase of a habitual residence with a value below 130,000€ and when the acquirer is less than 35 years old.
• 0.3% for a mortgage intended for the purchase of a habitual residence of a value below 130,000€ and when the same person is less than 35 years old.
• 0.1% in the purchase of the habitual residence with a value below 180,000€ and when the acquirer is disabled.
• 0.1% for a mortgage intended for the purchase of a habitual residence with a value below 180,000€ and when the acquirer is disabled.
• 2% in notarial deeds which formalise the transmission of properties where the exemption of VAT is waivered.
It is always recommendable to ask the advice of a Spanish lawyer who will be able to advise you and calculate all taxes prior to the sales-purchase.